Credit Ágricole: Eurozone CPI's - FJElite
- Energy is expected to continue climbing this month, as refined oil prices rebounded strongly throughout the month after falling at the end of July. In addition, TTF prices also increased significantly over the last two months, with rising worries about low levels of gas storage. As a result, energy HICP should rise further from 10.3% to 15.2% YoY.
- All other aggregates should also be rising, albeit much more marginally. It is worth noting the continuing weakness in food HICP (which would only be up from 1.19% to 1.23% YoY), which we expect to rebound more substantially after the end of the summer, and further increase in core goods HICP (from 0.95% to 1.07% YoY) led by a rebound in clothing (the July increase was led by a one-off in German medical products). Finally, services HICP would rise from 3.28% to 3.30% YoY.
- In this context, we have core HICP up from 2.48% to 2.52% YoY.
- We have HICP ex-tobacco at 3.42% YoY, 3bp above the fixing as at Wednesday 25 August end of day.
- We have FR CPI ex-tobacco at 2.60% YoY. 5bp above the fixing.
- We continue to think second-round effects from the current energy shock will start to kick in progressively after the summer season, but will bite essentially during H127.
- As a result, we now expect HICPx to reach 3.60% YoY in Dec-26. 3.10% in Jun-27 and 2.06% in Dec-27. Our take is quite in line with market fixings until the end of 2027, before some divergence in H128.
- Finally, we expect core HICP at 2.52% YoY in Dec-26, 2.71% in Jun-27 and 2.40% in Dec-27.